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What is Music Worth?

"A Music Party"

This 1864 painting by Arthur Hughes illustrates an idealized family enjoying music together in an age before recording.

In 2008, I posted an article at Acceity entitled Music Everywhere. In it, I asked whether the ubiquitous nature of recorded music in the digital age enhanced or cheapened the role of of music in our lives. Those who read the post replied that today's abundant music is a good thing. Although music may no longer be as highly valued as it was in the past, there are now unparalleled opportunities for everyone to enjoy it.

I've been prompted to consider the value of music again after reading the results of a study released two weeks ago by Wharton marketing professor Raghuram Iyengar. The study, which aimed to determine the optimal market price for digital music downloads, is summarized at the Knowledge@Wharton web site, which also provides a link to the complete paper. Iyengar's main finding: music today is too expensive.

Online music retailers like Apple iTunes and Amazon.com currently charge customers about 99¢ per song for most downloads. Iyengar's study showed that this price may actually be inhibiting demand. He based his research on conjoint analysis, which involves offering consumers a variety of theoretical purchasing options and prompting them to choose which, if any, they find attractive. Judging by consumer's choices, Iyengar predicts that if record companies would cut the retail price of their music to about 60¢ per song, the accompanying rise in demand and sales would actually lead to an increase in their profits.

There is no sign yet that any major record labels are paying attention to Iyengar's research, but any means of boosting profit should be welcome news to them. Traditional recording companies have struggled greatly with the technological changes of the past decade. Not only have computers and the internet changed the way consumers acquire and listen to music, but these technologies have also made professional recording studios and paid publicity obsolete to new generation of artists. Almost anyone with enough time, practice, and ambition can today record and distribute a professional sounding album, but the staggering volume and diversity of the music available now means that most new performers can only expect to build a small niche of dedicated fans. There is nothing wrong with that. Even as technology has made music more commonplace and mass-produced, it has also made it more personal, so that each individual is more likely than ever to posses a very different collection of songs than that of his neighbor.

Decreasing the retail price of online music might encourage people to build the diversity of their music collections and be more daring about spending their money for something new or unfamiliar. Iyengar's study is significant because it suggests that the increased sales from a dramatic price cut would actually help musicians and record labels earn more for their work.

I still wonder what it would really mean for listeners to peg the value of their songs at 60¢ a track — less than a candy bar. Such a low value strongly suggests that most recordings are regarded as passing entertainment or background noise, and only rarely as inspiring or transformational works of art. When is a song worth more than 60 cents? What is the future of meaningful music? Is that future outside the realm of recordings? What kind of creative innovations could make a song so moving, so thrilling, or so unique, that we would give it greater value?

4 Replies to "What is Music Worth?":

John Quincy Adams wrote:

4 February 2010 — 9:02 pm

I don’t think 60 cents is too low, especially since a lot of people get music for 0 cents. I don’t think recorded music is ever going to go back to being something that people buy all the time, and that artists make loads of money off of.

I think the thing to do is to admit that most people aren’t willing to pay a lot of money to buy an online download; so it’s time to give those away, and create physical things, things that people can hold and cherish, and that mean something.

Meaningful music is created in the recording studio, but it is also created on the stage. If the debate is “how do artists make money,” it’s certainly not going to be from selling MP3s. Live shows are one piece of the puzzle, giving people something unique and different, rather than just another MP3 on iTunes.

Oh Jesus I don’t think any of this makes sense. But basically: MP3s should be free anyways, mostly because they already are for most people. So make real vinyl records, make physical things that people will want to buy if you want to make money. Put on good shows, make it more of an experience than just something that people download.

John Quincy Adams wrote:

5 February 2010 — 9:03 am

Also, this article from today is pretty relevant:

“As Eric Harvey’s piece concluded, the fallout from the current shifts in music distribution and economics will need to involve a redefinition of music’s value. The recorded music industry is waning, and we’re passing through an inflection point as stressful and crucial as the 30s and 40s, when publishers and musicians took their stand against “canned music.” As it wanes, the modes of thinking it’s generated– of individual engagement with its product as the default form of listening– will also become less important. The social, useful life of music– sharing, dancing to, mixing, playing, playing with it– will be the most fascinating and fertile part of it, for writers as much as for businessmen and musicians.”

I do n0t think the low price of an MP3 says much about the quality of music (the quality of specific songs relies mostly upon the listener). I agree with Adams when he says that artists should create something tangible (like a record or collection) and put on entertaining performances to make money. Those are the things which reveal an artist’s fan base, and also gives the fan something special which reminds them of a certain time in their life (such as my uncle, who has an almost complete collection of Beatles albums from his youth).

The fact that a majority of people obtain music without paying anything doesn’t say much about a certain song, to me, other than that people really like said song. Besides, we can’t all go to concerts everyday, nor can we rush out to buy every album simply because there are one or two songs which we really enjoy, the rest of the album to be skipped over. It’s when people really enjoy a particular artist, they buy a whole album – but, today especially, a majority of the public is only exposed to a couple songs by a single artist.

Most people “illegally” download music, receive recordings from friends, utilize music gnome sites (like Pandora) or make their own mixes from listening to the radio (mix tapes, anyone? I know I’m guilty of that one). And, the fact that music is so widely shared definitely says something about the quality of music today. It doesn’t matter if you are listening to Vivaldi’s “Concerto in C Major” or “Tik-Tok” by self-proclaimed party girl, Kesha. Every song evokes a different feeling for different people at different times. And, who could put a price on that?

John Q, I really like the quote you posted from Pitchfork, and I hope it’s vision of the future is spot on. As for your own comment, I agree with just about all you say. However, I will add, it is hard to know whether most people get their music for 0 cents, even if most people my age do, and it is possible that many of these people would really be willing to pay something for music, just not at the current price. That’s the gist of the research described here. Whether the survey responses would really bear up in reality is an entirely different question.

I also think it might be premature to say that recorded music will never go back to being something people buy all the time. The internet is still an infant technology. Today it is a wide open sea where restrictions against file sharing are impossible to enforce — much like the Caribbean of the 1600s. It might have seemed to the pirates then that although some would be caught from time to time, the ocean was too vast for piracy itself to ever really stop. It went on for ages. But Caribbean piracy did ultimately stop, to become the stuff of storybooks and movies. Technology changed, laws changed, attitudes changed. There is no guarantee that the internet will always permit easy and unenforceable breaches of the law. A new technological development or legal innovation could end file sharing as suddenly as it began, and there are many resourceful people who want that to happen.

Catrina, I’m glad you found the site. I like how you say that the quality of specific songs is a subjective interpretation of the listener, and I’m glad that you mentioned your uncle’s Beatles albums — that really demonstrates how tangible things can mean something specific to us as individuals because they relate to our lives and our experiences. You’re saying, I think, that the value of music stems as much from the listener as from the performer, that it is an interactive process. Like you say, it is priceless — and it also squares well with that article posted by our deceased one-term president friend. However, you forgot one thing. We don’t have to go concerts every day. We don’t have to remain just listeners — look at the painting at the top of this article. Before people had recordings, they didn’t go to shows all the time, but they certainly made more of their own music. They made music at home, at church, and working in the fields. Only with the advent of recording did people become afraid of ever singing aloud.